20 June, 2025Understanding the Concept of Yield Farming
Yield farming is a DeFi strategy where users provide liquidity to protocols in exchange for rewards.
How it works:
- Users deposit tokens into a liquidity pool
- Earn interest, fees, or additional tokens
- Rewards vary by protocol and risk level
Risks:
- Impermanent loss
- Smart contract vulnerabilities
- Market volatility
Yield farming can be lucrative but requires careful risk management and research.